Planning for your own financial future, as well as operating, selling or purchasing a veterinary practice today will at some point require an objective fair market value assessment, for purchasers, vendors, financiers and advisors. Whether it is for partial or total sale, refinancing, incorporation, wealth and personal planning, marital or business dissolution, expansion, or comparison a valuation can serve numerous purposes to help you reach your goals.
Personal Financial Planning
All of us would like to retire in control of the timing, in control of our finances, our health, and with the standard of living we desire after years of hard work. A financial plan is a tool to help each individual, couple, or family help reach their goals by balancing financial protection, investment strategy, and lifestyle planning. Too many professionals wait until it is too late to obtain advice on their own financial issues and lose control of one or more of the things we would like to control. A financial plan follows you through the lifestages of your career and can be started at any time!
Inevitably every practice owner will have to plan for their own succession out of ownership. The process of succession planning goes well beyond just an evaluation, and certainly rules of thumb that existed many years ago no longer apply. A lack of structure to the succession planning process and the pre to post transaction issues can and does result in lost opportunities, missed financial and career planning goals, frustration and unnecessary delays. Process facilitation or coaching can help preserve a relationship between vendor and purchaser and simply streamline the process of practice transition.
Any new business today starts with debt, no clients, no cash flow, and that means risk! Our marketplace suffers from increased fragmentation and the addition of another new veterinary practice may be a very high risk venture in some communities. To mitigate risk an informed decision is always recommended, not only to be able to obtain financing, but also to help a prospective owner understand risk and their likely financial outcome in the early years in particular. A structured feasibility study can help put into context the likely client base you’ll have, development costs of a new practice, debt carrying obligations and financial outcome.
Practice Efficiency Analysis
The goals of a business including a veterinary practice are simple: be effective and be efficient. Proficiency in those areas means you will have profitable business, and an optimally valuable business. One of the challenges is in identifying areas of operational opportunity on the revenue or profit centre side, as well as efficiency on the expense site. Other functional areas of the practice like human resource infrastructure, marketing effectiveness, and acumen of the value drivers of practice will ‘trickle down’ to the sort of financial results that optimize profitability. An efficiency analysis is a ‘snapshot’ of the various functional areas that combine to make up a veterinary practice and using benchmarks in the industry and existing resources, helps to reinforce areas of strength, identify opportunities, and stage a plan to optimize your effectiveness and efficiency.
Strategic Planning Facilitation
Often there is consideration above and beyond operating the practice day to day about what other business models, innovation, and diversification opportunities there are. Practices have many choices on how to operate, and what to do with them. Strategic planning is dedicated, facilitated time to help you, and others you may be considering working with, develop an analytic path and make informed choices to help in reaching goals and prioritizing choices.